On Tuesday, the Centers for Medicare & Medicaid Services (CMS) approved the Advanced Diagnostic Laboratory Test (ADLT) status for Guardant Health, Inc.’s (NASDAQ:GH) Shield blood test for colorectal cancer (CRC) screening.

The U.S. Food and Drug Administration (FDA) approved Shield in July 2024 as the first blood test for primary CRC screening.

Medicare already covers the test.

For Medicare patients beginning April 1, the Shield test will be reimbursed at $1,495 during the initial nine-month ADLT period.

Also Read: What’s Going On With Cancer Diagnostic Firm Guardant Health On Friday?

During the initial ADLT period, Guardant Health will collect, assess, and submit private-payer payment rate data for the test. Beginning January 1, 2026, the median will be used by CMS to determine Medicare pricing. This rate will be the payment amount for Shield from January 1, 2026, to December 31, 2027.

In January, Palmetto GBA, a Medicare administrative contractor that administers the Molecular Diagnostics Services program (MolDX), granted coverage for the Guardant Reveal test to monitor for disease recurrence in CRC patients following curative intent therapy.

William Blair writes, “Securing ADLT status is key to solidifying and driving ASPs incrementally higher than what was assumed in guidance.”

The analyst Andrew Brackmann sees the update as favorable and reiterates the Outperform rating.

During the fourth-quarter call, it was mentioned that ADLT status and the price increase were not factored into Shield’s guidance. The company had projected annual screening revenue between $25 million and $30 million, with volumes ranging from 45,000 to 50,000.

William Blair says the $575 increase in Medicare reimbursement (from $920 to $1,495) could add around $10 million in additional revenue, assuming the same mix as previously estimated.

Price Action: GH stock is up 14.5% at $41.04 at the last check Tuesday.

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